The Dutch current account balance increased by €7.1 billion in the third quarter of 2023 compared to a year ago, reaching a record level of €32.2 billion. The increase can be attributed to developments in the goods account and the primary income.
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The current account balance is the difference between income from abroad and expenditure abroad in the current account. The current account includes international trade in goods and services, and income transactions such as interest, dividends and pension payments. The Netherlands has had a positive current account balance for many years.
At De Nederlandsche Bank, we independently compile statistics on the Dutch financial sector and economy. This article is based on these statistics. More information on our statistics and all dashboards can be found on our Statistics homepage.
The driver of the positive current account balance has traditionally been the surplus on the goods account, or the difference between imports and exports of goods. This surplus is €6.2 billion higher than a year ago because the value of imports (-15%) decreased more than the value of exports (-10%).
A second reason for the increase in the current account balance is a €2.2 billion increase in the primary income balance (from €3.9 billion in the third quarter of 2022 to €6.1 billion). This increase is largely due to interest income on DNB’s balance in TARGET2, the system used by commercial banks and central banks in the EU to transfer money to each other. A country's TARGET2 balance is the difference between incoming and outgoing cash flows accumulated since the introduction of this system.
DNB had a positive TARGET2 balance at the end of the third quarter of 2023. This means that Dutch banks received more money from abroad than they transferred abroad. DNB receives a fee on this positive TARGET2 balance which is based on the ECB's policy rate. This rate has risen in recent quarters to curb inflation in the euro area. TARGET2 interest income is more than offset by interest payments to Dutch banks holding deposits with DNB. However, this is not visible on the Dutch balance of payments, as this only reflects transactions with foreign countries.
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For additional explanation and charts on the balance of payments and current account, see our balance of payments dashboard.
Current figures can be found in Table 12.1 (the main table of the Dutch balance of payments).
More information about TARGET2 can be found here.
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